Nov 2011 Financial News

Capital and Credit profits slip 6.3%

Nov 16, 2011

CAPITAL and Credit Financial Group (CCFG) saw its net profit for the end September quarter slip by 6.3 per cent from the prior year after recording $15 million in impairment losses related to the closure of an associated company in Cayman in May.

Express Remittance Services (Cayman) Limited (ERS), which has as its main business activity the facilitation of electronic transfer of funds from the Cayman Islands to other countries, predominantly Jamaica, was closed on May 21, 2011. This was due to the increasingly challenging market conditions in that territory, increasingly higher operational cost and against the background of Capital & Credit's commitment to the continuous review of the operations of all its subsidiaries in order to ensure greater efficiency and profitability.

Consequently, CCFG recognised impairment losses of $42.6 million in the end June quarter and the further amount during the three months ending September 30, 2011, which brought the total impairment to $68.6 million.

CCFG posted net profit of $115.7 million from $476.2 million operating during the review quarter compared to net profit of $123.5 million from operating income of $454.2 million.

Imani Duncan, group marketing manager of Jamaica Money Market Brokers (JMMB), which has made a bid to acquire up to 100 per cent of CCFG and which has entered into an conduct of business agreement with the merchant bank (stipulating that CCFG operate in a manner which ensures the preservation of value for its shareholders), said the performance in the review quarter met the requirements of the agreement.

JMMB submitted the completed application, before the end of September, to the Bank of Jamaica (BOJ), from which it requires regulatory approval for the deal to go through.

Duncan said JMMB still hopes for an indication from the BOJ by the end of 2011.

CCFG's net interest income fell from $345.8 million to $230.6 million, as a consequence of lower income being booked on the bank's loan portfolio, but grew fees, commission and trading income by 123 per cent, from $110.2 million to $245.7 million.

CCFG, in a note to shareholders accompanying the financial statements, said that its management team "continues to be proactive in taking the necessary precautionary measures by reassessing and realigning its business models and will continue to implement improved workflows and processes".

"The Financial Group will continue its growth by capitalising on other opportunities to grow loans and other fee-Income activities, as well as develop new value-added products and services," said the statement signed by group chairman Ryland Campbell and company director Andrew Cocking. "In addition, a new alliance in progress is anticipated to generate positive results in the group's product and service diversification and will significantly expand customer access, thereby enhancing profitability and service."


Source:
Jamaica Observer
Wednesday November 16, 2011

http://www.jamaicaobserver.com/business/Capital-and-Credit-profits-slip-6-3-_10174603#ixzz1dzrg3u2q